In India’s startup ecosystem, 2024–25 was a year of financial recalibration. With venture capital flows slowing and equity valuations facing a reset, many founders found themselves at a crossroads: scale back, raise equity at lower valuations, or find a smarter alternative.
A growing number chose the third path.
Instead of tapping VCs, these startups turned to secured debt, loans backed by assets, receivables, or personal/corporate guarantees. Whether through bank facilities, NBFC lines of credit, or project-based financing, they found ways to fund growth without giving up equity.
Secured loans are typically seen as conservative instruments. But in the hands of operationally strong startups with predictable cash flows, they’ve become strategic growth levers. These loans offer:
- Lower cost of capital than equity,
- No dilution of founder or investor ownership, and
- Structured repayment aligned with business cycles.
What’s emerging is a new cohort of startups, capital-efficient, asset-backed, and financially disciplined, that’s using debt not as a stopgap, but as a deliberate funding strategy. From electric mobility platforms scaling fleet operations, to B2B life science manufacturers expanding capacity, and energy-tech players funding capex, these companies are writing a new playbook.
Sector Snapshots of India’s Debt-Funded Disruptors
| Startup Name | Sector | Business Activity | Legal Entity Name |
| Tenshi Pharmaceuticals | Lifesciences | Pharma formulation research & custom manufacturing services | Tenshi Pharmaceuticals Private Limited |
| PMI Electro | Automobiles | Electric buses & smart EV mobility solutions | PMI Electro Mobility Solutions Private Limited |
| Kals Distilleries | Beverages | Premium alcoholic beverages & spirits | Kals Distilleries Private Limited |
| Pothysswarnamahal | Apparel & Luxury Goods | Large-format jewelry retail chain | Pothys Swarna Mahal Private Limited |
| Avet Lifesciences | Lifesciences | Specialty APIs & pharmaceutical intermediates | Avet Lifesciences Private Limited |
| Battery Smart | Automobiles | EV battery-swapping infrastructure for 2W/3W | Upgrid Electrilease Private Limited |
| Everest Fleet | Software | Fleet-management & leasing software for EV operators | Everest Fleet Private Limited |
| Askbrake | Auto Components | Manufacturer of clutch plates, brake pads/shoes, and control cables | Ask Automobiles Private Limited |
| Bhrtym | Beverages | Health-focused ready-to-drink & functional beverages | Bharatiyam Beverages Private Limited |
| Bluecraftagro | Agri Commodities | Agri-commodity trading & supply‑chain platform | Bluecraft Agro Private Limited |
Who Borrowed the Most in FY2025?
Startups That Turned to Debt to Fuel Their Next Big Leap
As India’s startup ecosystem matured through FY2025, a clear funding shift emerged: equity took a back seat, and debt moved into the driver’s seat. In a year when valuations corrected and VCs grew selective, several operationally strong startups turned to secured loans to bankroll their next phase of growth. This wasn’t desperation, it was strategy.
The data below showcases 10 high-growth companies that leveraged debt as a deliberate financial lever. From EV infrastructure to pharma and specialty chemicals, these startups raised significant amounts, secured against assets, receivables, or personal/corporate guarantees.
What This Data Reveals
This charge amount data reveals a few key patterns:
- Tenshi Pharmaceuticals leads the chart with over ₹856 Cr in debt, highlighting how capital-intensive R&D and production scaling in life sciences are being underwritten by lenders confident in the sector’s long-term cash flows.
- PMI Electro and Everest Fleet show the EV transition isn’t just about green ambition, but also backed by bold balance sheets, where electric buses and leased EV fleets are being funded by structured debt.
- Companies like Pothysswarnamahal (retail jewelry) and Avet Lifesciences (pharma) are tapping debt to expand inventory, distribution, or manufacturing, without diluting founder equity.
- Even smaller players like Askbrake and Bluecraft Agro demonstrate how niche manufacturing and B2B segments are gaining lender confidence.
In essence, this cohort reflects a new playbook, where debt is not a fallback but a forward-looking choice for companies with visibility on revenues, assets, and repayment cycles. The rise of debt-funded growth signals greater financial discipline and maturity in India’s startup landscape.
Built on Borrowed Capital: Total Debt Raised Since Day One
These Startups Didn’t Just Borrow, They Engineered Growth on Credit
Forget bootstrapping or chasing down VCs. These ten startups turned to secured debt and turned it into momentum. Cumulatively raising over thousands of crores since inception, they’ve built electric fleets, specialty factories, pharma pipelines, and retail empires, not by giving up equity, but by betting on their business fundamentals.
From EVs to agri-processing, life sciences to luxury retail, this list reflects a powerful trend: when your margins are healthy and execution is sharp, lenders line up, not just to fund, but to fuel your scale. Debt here isn’t a fallback, it’s a feature of growth.
What the numbers tell us:
Startups like PMI Electro and Tenshi Pharmaceuticals top the list in cumulative debt, signaling large-scale capex and strong lender trust. Mid-sized players like Bluecraft Agro and Pothysswarnamahal have also leaned significantly on debt, likely to expand manufacturing, retail, or export infrastructure. Even emerging ventures like Battery Smart and Askbrake have secured substantial funding, showing that innovative models in EVs and auto components are gaining traction with lenders.
Overall, the data reveals a clear trend: debt is enabling asset-heavy, operationally sound startups to scale efficiently, without diluting ownership, while sending a strong signal of creditworthiness and capital discipline.
How Much Debt is Too Much?
The Debt-to-Equity (D/E) ratio tells us how much skin a startup has in the game, versus how much it’s borrowing to scale. It’s a window into a company’s financial mindset:
- High D/E? Think aggressive, fast growth funded through lenders.
- Low D/E? Think cautiously, steady scaling with minimal borrowing.
A higher D/E ratio means the company is heavily leveraged, risky, yes, but can be rewarding if the business scales as planned. On the other hand, a low D/E reflects more conservative capital management, better solvency, and typically stronger comfort for lenders.
We grouped the 10 startups into three bands:
🟥 High Leverage (D/E ≥ 3x)
- Askbrake – 170.08
- Kals Distilleries – 9.10
- Bluecraftagro – 4.74
- Pothysswarnamahal – 3.31
- PMI Electro – 3.00
These startups are aggressively leveraged, relying heavily on borrowed funds relative to their equity base.
- Effect: While this can supercharge growth, especially in capital-heavy sectors (like EVs or manufacturing), it also increases financial risk. Any revenue shock or interest rate spike could strain repayments and impact solvency.
- Investor View: High risk, high reward. Lenders may demand stricter covenants.
🟨 Moderate Leverage (D/E between 0.5x and 1x)
- Everest Fleet – 0.89
- Avet Lifesciences – 0.54
These companies maintain a balanced capital structure.
- Effect: Indicates prudent use of debt to fund expansion without overexposing themselves to risk. They likely have stable cash flows and strong lender confidence.
- Investor View: Financially healthy with room to borrow more if needed.
🟩 Low Leverage (D/E < 0.5x)
- Bhrtym – 0.18
Low reliance on debt. This can mean strong internal accruals or a conservative capital strategy.
- Effect: Strong solvency, low financial stress. However, they may be missing out on the growth acceleration that debt financing can offer.
- Investor View: Very safe, but potentially underleveraged for aggressive scale-up.
Tenshi Pharmaceuticals & Battery Smart –These companies may not have disclosed full financials or could be in early stages without significant liabilities.
Bottom Line:
High D/E isn’t always bad, especially for infra or manufacturing startups chasing scale. But it does increase interest costs and repayment pressures. Moderate D/E offers a strategic edge, combining growth capital with financial discipline. Low D/E showcases stability and long-term solvency, often favored by conservative lenders.
Conclusion: Debt is the New Discipline
India’s startup ecosystem is witnessing a quiet but powerful transformation. Debt is no longer a lifeline; it’s a lever.
These startups didn’t turn to loans out of desperation. Instead, they chose debt strategically, to scale faster, retain ownership, and fund capex-heavy growth without dilution. From electric mobility and pharma to agri-tech and luxury retail, this emerging cohort is rewriting how early and growth-stage companies think about capital.
What stands out is the intentionality. These businesses are not just creditworthy, they’re credit-smart. They’re using secured loans to build long-term assets, expand operations, and back solid fundamentals.
This signals a broader shift:
- From chasing high-valuation equity rounds to pursuing financial sustainability
- From founder dilution to founder control and capital discipline
- From hype cycles to real infrastructure-backed scale
In a market where capital is becoming more cautious, debt-backed growth offers clarity, control, and conviction. These startups are showing that you don’t always need venture capital to build ventures of scale; sometimes, a well-structured loan is the boldest move you can make.
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